Clothing retailer H&M has reported a lower than expected sales rise in April due to unseasonal weather conditions in the UK and internationally.
H&M saw a 5% increase year-on-year, measured in local currencies. Polls carried out by Reuters expected a 9% rise.
The world‘s second-biggest fashion retailer noted that “the cold spring which continued into April in several of H&M‘s large markets has had an unfavorable impact on sales of transitional garments.”
While Germany in particular saw snow last month, H&M‘s sales in the country grew by 2%. Nonetheless, it is widely evident that fashion sales continue to be largely volatile at this time of year.
Similarly, British clothing chain Next also decreased its full-year sales guidance as it experienced weakening demand for clothing and slowed consumer spending.
“Cold weather was no doubt the main problem and given the much warmer weather recently across Europe, together with some pent-up demand following a cold spring, we expect much stronger sales in May,” said Societe Generale analyst Anne Critchlow.
“Poor weather conditions are a common and oft repeated excuse given by clothing firms for weak results. Whether it’s been too hot, too cold, too rainy or too dry the weather offers a catch all excuse. While H&M probably have good reason in citing an unseasonably cold April to justify poor sales, there are a number of other factors at play which are not weather related,” said Jon Copestake, Chief Retail & Consumer Goods Analyst, The Economist Intelligence Unit.
Slower growth has been reported by a large number of retailers, both clothing and non-clothing as fears around the global economic climate grow. Not only does the Brexit referendum weigh on European sentiment but Chinese growth is slowing and emerging markets around the world have been struggling with low oil and commodity prices, prompting a number of currency devaluations and, in some cases, austerity drives. Improvements in sales will probably come as the weather improves, releasing pent up demand and some relief will also probably come as the Brexit debate is resolved one way or another. However the global economic environment remains uncertain. Chinese debt and oil price volatility will continue to pose concerns for retailers throughout 2016.